Back in 1946, a man named Louis Engel was hired to run the advertising and promotions at Merrill Lynch. Engel’s unorthodox approach to advertising resulted in thousands of leads for Merrill Lynch brokers nation-wide. How did he turn the investment industry on its head? By taking the investment broker lingo out of its advertisements, simplifying the message, and educating its potential clients about stocks and bonds.
“He presumed that most readers glancing at a brokerage ad knew as little – or even less – about stocks and bonds as he himself had known prior to joining Merrill Lynch. In his copy he tried to explain investing principles in plain and simple language.”
Engel’s most famous and innovative advertisement ran on October 19, 1948 in the New York Times. The ad contained 6,540 words – the most anybody had ever used in a single page.
What everybody ought to know about this stock and bond business
Soon after the ad ran, Merrill Lynch received more than 5,000 requests for pamphlet reprints.
“What was most amazing,” Engel recalled, “was that we got hundreds and hundreds of long and thoughtful letters.” Some respondents were profusely appreciative. One person wrote: “God bless Merrill Lynch;…I have been wanting to know this all my life;…I owned stocks and bonds and I never really knew what I owned.”
The firm ran the same ad in newspapers across the country for years and the total number of responses exceeded 3 million, which translated into millions of prospective customers for the firm’s brokers.
Engel faced a lot of resistance from the firm’s senior partners about his controversial advertising approach. They thought, if we teach our potential customers everything about investing, they’ll have no reason to call us. But quite the opposite happened, as you can imagine. Educating the masses about the ins and outs of the stock and bond markets got people excited and wanting to learn more about investing.
And who do you think they called when they were ready to invest their own money? Merrill Lynch, of course. The company that took the time to explain things to them and simplify the message, rather than talking down to them and using complicated lingo.
It’s amazing to think that this happened nearly 70 years ago, when the world of investing was more opaque than it is today and brokers on Wall Street had little incentive to educate the masses on Main Street. But even today the best investment firms and advisors take the time to educate their clients about the stock market and how to invest. Not everyone is cut-out to invest on their own and so firms have little risk of losing clients to the self-directed route. Educate, add value, and build trust and you’ll gain a customer for life.
I know that’s one of the main reasons why I started blogging about money – aside from a way to set goals and hold myself accountable – was to help educate others about personal finance and investing. It has been a remarkable journey to share my experiences and lessons learned over the past seven years and, surprisingly, the stories have been compelling enough that thousands of you visit daily to read what happens next. Financial literacy at its finest!